A study on the strategy decision making process of ethnic chinese companies in Singapore and Malaysia

Khatri and Ng (2000) studying strategic decision making processes established that the use of intuition synthesis (comprising judgement, experience and gut feeling) was positively associated with performance in an unstable environment, but negatively so in a stable environment. This research was built upon their study and conducted in Asia, specifically in Singapore and Malaysia, an environment described as unstable and where business leaders are often portrayed with characteristics of intuitive, entrepreneurial and fast decision making. The aims of this research were to investigate the relationships of environmental instability, guanxi and learning orientation on strategic decision making processes and to assess the impact of a combined intuitive decision approach and formal strategic planning on a company's performance. Data obtained from the survey responses of 117 Singapore and 131 Malaysian companies were analysed by using exploratory principal component analyses and internal consistency reliability analyses (Cronbach's α) to create scores for the variables and performance dimensions. Correlational analyses were then conducted for the first eight hypotheses, and a hierarchical multiple linear regression analysis was applied on the ninth hypothesis on performance as the outcome variable, with an intuitive decision approach and formal strategic planning, and the interaction between them as predictors. Follow-up qualitative research was conducted on 5 senior managers from Singapore and 5 from Malaysia using semi-structured questions. The findings indicated that environmental instability had a positive relationship with the practice of guanxi and an intuitive decision approach whilst it had no relationship with learning orientation and formal strategic planning. The study demonstrated that guanxi was positively associated with an intuitive decision approach and it had no relationship with formal strategic planning. The findings also indicated that learning orientation was not related to an intuitive decision approach but it had a positive relationship with formal strategic planning. Finally, the study provided evidence that there was indeed a multiplicative effect of an intuitive decision approach and formal strategic planning on company performance.